Many people work hard to set themselves up to retire early. And there can be benefits to going this route.
Early retirement might make it possible to do things like travel while you're still fairly young and in good health. Plus, if you're in a stressful work environment, retiring early means getting to escape it sooner.
But early retirement has the potential to backfire on you in a really big way. Here are a few reasons you might end up truly hating it.
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1. You may be stressed financially
It's common for retirees to worry about running out of money. Even if you enter early retirement with a loaded 401(k) or IRA, there's always the risk of depleting those funds in your lifetime. And that risk may be even greater if your money has to last for a number of extra years.
With early retirement, you run the risk of adding more financial stress to your plate. You might feel a lot more comfortable with, say, a $2 million nest egg when you're retiring at age 67 as opposed to age 57.
2. You might have to scramble to put health coverage in place
Medicare eligibility begins at age 65. If you retire early, you may have to wait for a number of years until you're able to sign up for coverage. And that could mean paying a small fortune of money to buy health insurance yourself.
Of course, you may have the option to retire early and jump onto a spouse's workplace plan. If not, you may want to research the cost of health coverage ahead of your early retirement to make sure it's feasible financially.
3. You might end up bored out of your mind
People who retire at a typical age often struggle with boredom. If you leave the workforce at an earlier age than usual, you might struggle with boredom even more.
Let's say you're retiring at age 67. At that point, it's likely that a number of your friends and peers will be retiring as well. If you're married, your spouse may be retiring, too.
On the other hand, if you retire early at age 57, you may be the only person in your social circle to exit the labor force that young. And that means you may not have people to spend time with when you're trying to fill your days. That could lead to an unhappy experience -- even if you have the money to go out and do things.
Think carefully before retiring early
The idea of early retirement might seem appealing for a number of reasons. But before you gear up to end your career at a relatively young age, think about the potential drawbacks involved.
If you're feeling burned out professionally, one thing you may want to do is try scaling back your hours. And if that's not possible, consider a late-in-life career shift.
You may be in a position where you can take a pay cut and move over to a job that's less demanding and far more fulfilling. That way, you might be able to leave your nest egg untapped for longer, and you might have access to a subsidized group health plan. Just as importantly, you might manage to stave off boredom, which is a good thing for your mental health.
